What is TaxAid?
TaxAid is an amazing charity that gives people on low incomes the tax advice they need – for free. ‘Low incomes’ is defined as those earning under £20,000 per year. They are there to help people if their problems cannot be resolved with HMRC.
Why was TaxAid set up?
If you have an issue with your tax position, one of the trickiest things is the sheer volume of regulation. HMRC must have rules to encompass every possible situation a taxpayer might find themselves in. But wading through everything to find the information that applies to you is often impossible for a non tax specialist.
This is why tax professionals established the charity TaxAid. They could see that people on the lowest incomes were at an unfair disadvantage simply because they couldn’t afford tax advice. The consequences are significant and well documented.
For example, there have been taxpayers paying too much tax for years. Whilst a tax rebate claim can be backdated, this only applies to the last four tax years. For those who don’t realise they are paying too much, there is the potential of losing out on all the years prior to that deadline.
Actually following the rights of appeal process is not easily understood and puts those who cannot afford representation at an obvious disadvantage.
Worst case scenario…
At the most extreme end, some taxpayers have been put into bankruptcy without good cause because their tax demands were calculated on estimated numbers. Without the advice of a professional, the ordinary taxpayer would not know where to start with most of these elements. If you cannot afford this help, you are really at the mercy of the system.
Have things got any better for lower income taxpayers?
Actually, there is more need than ever before for the confidential, free tax advice that TaxAid and Tax Banana provide. Even more people are self employed, often on low incomes, and with a host of tax reporting demands to meet.
There are also lots of people who need more than one job to make ends meet. Both of these things lead to a more complex tax position for the individual and, sadly, more “casualties of the system”.
HMRC have a full range of penalties in place for missing paperwork deadlines and making mistakes. There is also a renewed spotlight on debt collection and being tax compliant. This makes for a decidedly scary environment for those on lower incomes who need an expert ear to make sense of their own situation.
How TaxAid helps
TaxAid provides help directly to individuals through their national helpline 0345 120 3779, or by email. They also have face-to-face meetings in Newcastle, Birmingham, Manchester and London. Their website is a great source of tax information written in plain English. Interestingly, they also provide training for other organisations on the process of identifying problems and getting to the right referral.